Finding dollars to save makes sense

Three ways to generate for future goals and emergency funds

Why save? Individuals and families save money for their future goals and to have an emergency fund available to provide a cushion when unplanned expenses pop up. The toughest part is finding the dollars to save. Hard-to–find savings can be generated in three ways:

  1. Increase income: Take on a second or part-time job, but try to make this a short-term situation. Enter or return to the work force if you have not worked for a while.  Do you have extra things around the house, yard or workshop you no longer use or need?  Consider selling them online, in the classifieds or in yard or garage sales.  Do you have a hobby that might help you generate income?
  2. Cutting/decreasing spending: Break costly habits, e.g., eat packed instead of purchases lunches, stop smoking, track how you spend cash every day—you might be surprised how much you spend on small purchases such as coffee, soda, snacks, etc. Switch, stop or swap: Switch to brands with acceptable quality, but lower prices. Stop purchasing items that are really “wants” and not necessities. Swap your skills and talents for needed services that would otherwise cost you money.
  3. Directing or redirecting current resources: Pay yourself first through automatic payroll deductions. Add all “found money” or “windfalls” to your savings account, e.g. tax refunds, overtime pay, raises, gift money, refunds, and rebates. Pay installments to yourself after paying off a loan, e.g., keep paying that car loan to a savings account for the next car.  Investigate your current income tax withholdings. Many people tend to overwithhold.

Changing habits and making sacrifices is never easy, but the rewards can be a sense of financial secure and successfully reaching financial goals. For additional resources:

www.mimoneyhealth.org

http://www.sec.gov/investor/alerts/12tipsfor2012.htm

http://pubs.cas.psu.edu/freepubs/pdfs/ui371.pdf

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